3 Top Dividend Stocks Worth Doubling Down On Now

Dividend-paying stocks have historically delivered superior performance compared to those that do not distribute dividends. Below, we highlight three standout dividend-paying investments with strong potential.

When it comes to accumulating substantial wealth over the long haul, few strategies rival investing in dividend-paying stocks. One key advantage is that a robust and expanding dividend payer continues to deliver payments to shareholders regardless of economic conditions. Even if the share price experiences temporary stagnation or decline, those reliable dividend checks typically continue to flow in without interruption.

Furthermore, firms committed to dividend payments often boost their distributions consistently year after year. On top of that, provided the business maintains solid operational performance, the stock price itself is likely to appreciate steadily over time, compounding the benefits for investors.

This creates a highly favorable scenario with multiple layers of upside potential.

The Strong Argument for Dividend Investments

If you haven’t fully embraced dividend investing yet, consider the compelling data presented in the table below, which illustrates long-term performance differences:

Data source: Ned Davis Research and Hartford Funds.

The evidence is clear: dividend stocks offer exceptional returns without compromising on growth or stability. With this in mind, let’s explore three excellent dividend-paying options that merit consideration for building a resilient, long-term investment portfolio.

1. Microsoft

Microsoft stands as a powerhouse in the technology sector, boasting the leading Microsoft 365 suite of productivity applications—previously known as Office—alongside the formidable Azure cloud computing platform, the popular Xbox gaming ecosystem, the ever-present Windows operating system, and the professional networking site LinkedIn, among a vast array of other innovative products and services.

Over the last ten years, the company’s stock has delivered impressive average annual returns of 24 percent. However, it has experienced a year-to-date decline of 17 percent as of February 13, which has elevated its dividend yield to an attractive 0.9 percent. This yield becomes even more enticing when factoring in the rapid pace of dividend growth; the most recent annual payout reached $3.64 per share, a significant jump from $2.54 in 2022 and $1.89 back in 2019.

Microsoft continues to demonstrate robust growth momentum. In its latest second-quarter earnings, revenue surged by 17 percent compared to the prior year, while net income climbed an even stronger 23 percent. Chief Executive Officer Satya Nadella emphasized during the earnings call that the company is still in the early stages of artificial intelligence adoption across industries, yet Microsoft has already developed an AI business unit that surpasses the scale of some of its largest established franchises.

Adding to its appeal, the stock appears reasonably valued with a forward price-to-earnings ratio of 24, which is below its five-year historical average of 30, presenting a potentially opportune entry point for long-term investors.

2. Medtronic

Medtronic reigns as a global leader in the medical devices industry, currently offering investors a generous dividend yield of 2.8 percent. Over the past decade, it has consistently raised its dividend at an average annual rate of 6 percent, marking an extraordinary streak of 48 consecutive years of dividend increases—a testament to its unwavering commitment to shareholders.

The company is firing on all cylinders operationally, as evidenced by its second-quarter revenue growth of 7 percent year over year. Medtronic has recently launched the innovative Hugo robotic-assisted surgery system and secured Food and Drug Administration approval for a novel device designed to address urinary incontinence, a condition affecting approximately 16 million individuals across the United States. Additionally, the firm is strategically divesting its slower-growing diabetes business unit to sharpen its focus on higher-growth opportunities in other areas.

From a valuation standpoint, Medtronic’s stock looks compelling with a forward P/E ratio of 16.6, slightly undercutting its five-year average of 17, making it an intriguing pick for dividend enthusiasts seeking both income and capital appreciation potential.

3. Schwab U.S. Dividend Equity ETF

Our final recommendation diverges slightly from individual stocks—it’s an exchange-traded fund, or ETF, which functions as a diversified basket of securities that trades on the stock exchange just like a single share. The Schwab U.S. Dividend Equity ETF emerges as a standout choice for portfolio construction, blending a robust dividend yield of around 3.5 percent with a proven track record of capital appreciation.

This ETF meticulously tracks the Dow Jones U.S. Dividend 100 Index, which comprises 100 high-quality stocks that have demonstrated at least a decade of consistent dividend payments. Among its top holdings as of the latest data are stalwarts like Lockheed Martin, Chevron, and Texas Instruments—companies renowned for their reliable income streams and business resilience.

Expense efficiency is another highlight, with an ultra-low annual management fee of just 0.06 percent, translating to a mere $6 per year for every $10,000 invested. By allocating capital to this ETF, investors gain immediate exposure to approximately 100 battle-tested dividend-paying enterprises, positioning themselves to share in their ongoing success and prosperity.

If any of these dividend opportunities pique your interest, take the time to conduct further due diligence and consider incorporating them into your investment strategy for sustained wealth building.